On Startup Values

In Silicon Valley, ‘startup’ is one of the most common and the most valuable word one hears about town. Freely bandied about by those who were once in a startup, are currently in a startup or want to start one, the word is a badge of pride for those who have experienced it.

Less understood is what goes in to creating, sustaining, and growing a startup. Founders, money, employees, investors, technology and products are necessary but not sufficient ingredients for startup success. One of the crucial ingredients one rarely hears about and is usually not understood by most is Startup Values.

Values is not capital you can raise from VCs. Values are reflected by a few critical qualities founders and startup employees must either have or recognize and cultivate. Values are not transplantable a few months or years in to the journey. More than a few (very smart) founders I know dismiss it by saying “We will focus on values once we’re successful”. Wrong! Startup values are like a seed you plant on day one alongside your ideas and it needs the same care and nurture as your technology and products.

I have always felt that the key startup values are:

Honesty

Honesty in a startup primarily means interpersonal honesty between all the employees. Honesty is also the fabric that links objective measurement of a startup’s progress along chosen metrics and the startup’s stated goals. In between founders and employees and between multiple founders in the case of cofounders, honesty is the only way to sustain a working relationship.

How to get it right: Communications is a key component of honesty. Founders and CEOs must ensure everyone understands where they are, where they are going, and how they are going to get there. You can never communicate enough and email is perhaps the poorest mode of such communication. In a small team, a 5 minute sync meeting every day or 15 minutes every week should suffice.

How do you know its not working: When you find yourself ‘marketing’ or spinning the truth to your coworkers, you must have the courage to admit you’re not being honest. In a startup context, some typical phrases that should serve as warning signs include “It will be easy to raise money”, “Hockey stick growth is just a couple of features away” or “We can always acquire users through advertising” or “There will be lots of buyers for the company if you get to X number of users”. When employees hear such things from their CEO or founders, ask questions. If startups hear such words from their investors, take a long hard look at their track record and at your balance sheet.

Flexibility

In a startup, you often recruit friends, referrals from friends, and those you respect to the mission at hand. Flexibility doesn’t just apply to founders/CEOs but to everyone. Venturing in to areas adjacent to your area-of-comfort as far as your skills go will be often required. A good startup team at work is like an ongoing game of 3D twister. Flexibility, once it becomes part of your startup’s DNA, makes it better at evolution as well as adapting to challenges.

How to get it right: Be open when CEOs/founders ask you to do something beyond your area of expertise or experience. Voice your fears openly, express your challenges clearly. Ask for help when you need it, offer help when you see someone needing it.

How do you know its not working: When you hear CEOs/founders/employees express “Thats not what I was hired for”, it should serve as an early warning sign. If your startup is not good at handling failure (see below), it will be hard to build a culture of flexibility.

Creativity

A startup is (most of the time) an irrational pursuit with a high probability of not following its initial trajectory. Creativity, exercised at all levels from infrastructure/technology to design & delivery, is the most powerful value you can have to combat existing products you compete with or to highlight the one thing you excel at versus all others. It is an essential part that improves flexibility and helps a startup to navigate competition that may be better capitalized or entrenched. At a personal level, creativity is an everyday expression of how things get done in a startup with limited resources and money.

How to get it right: If a startup, prior to success (users or revenue) can point to something unique that they do that others do not, it is likely creativity that is at work.

How do you know its not working: If your coworkers, founders or CEOs talk too much about “This is how I did things at company XYZ” when it comes to talking technology, products, or your market, you should fear that your startup lacks creativity. More than any other area, past work is really not a good indicator of the future in startup.

Failure with grace

This is perhaps the most talked about ‘lean‘ (e.g. smart) aspect of a startup’s journey from idea to success and may be the most misunderstood. No one likes to fail even though fail-fast, fail-often, fail-early is an easy set of words to say. I believe failure with grace is not just for complex systems. Seemingly trivial interactions between team members are often predicated on success, not failure and unless everyone in the team in a startup can freely (and honestly) express failure, re-calibrate, and have a chance of re-delivering, each failure will be costly in an interpersonal sense.

How to get it right: All employees must be comfortable in saying “I failed at XYZ and here’s how I am going to get it right”. When there is no interpersonal unease or ‘cost’ to saying/hearing it, you will know your team is on the right path to integrate failure as a navigational mechanism to find the right direction.

How do you know its not working: When someone in the team fails ‘silently’ at a task or two and begins to find excuses vs. ‘claiming the failure’ is a dependable sign of lack of this startup value. Silent failures are deadly in all kinds of systems, and deadlier in a startup. A failure not owned at the first sign of it is a toxic seed that will threaten startup success.

Measurable heuristics

Every startup is based on a few early ideas about how their world ought to be. Startups must be honest with themselves to figure out the right measurements for their heuristics about how their product will evolve. Measurement and heuristics are the yin and yang of startup ideas. One cannot exist without the other or has no meaning without the other. A right balance between these two is often the hardest value to get right in a startup. Too much heuristics to guide you may mean unconstrained wander before you find your market while too much measurement will surely constrain good thinking with possible false positives and negatives. Measurement confirms innovation, but rarely initiates it.

How to get it right: Teams must have the discipline to listen to measurements for determining growth and listen to heuristic thinking to set the first vectors for experimentation.

How do you know its not working: Each discussion of a new feature, product, or change must be accompanied by “how will we know its working” discussion. Success is not pornography that you will know it when you see it. If you cannot measure success, it is likely you do not yet know how to go to there.

I hope you found something worth thinking about in this post and I’d love to hear from you (comments below or tweet @rohit_x_).

In a related future post, I will be writing about working with VCs that share these values and help your startup enhance them.